Destin Africa 32
Real Estate
By Samuel Kariuki
East African Real Estate Investors Discover the Working Class
T
he last 20 years of real estate boom in East Africa has changed our building landscape and inventory, as it quite rightly should have done.
Our starting point was a region that was short of every kind of building, from housing, to shops, through offices, warehouses, hotels, and even student hostels. In all, we faced a real estate landscape that was cripplingly underinvested. And we invested.
Choosing which type of investment barely mattered. Every type of property sold fast. Developments got snatched up even before the building bricks were laid, simply because the market had little to offer. We are no longer in that situation. But confusing our sector’s move to maturity with the end of real estate investment opportunities is a mistake. For, in our first years of heavy real estate investment, we concentrated primarily in high-end assets, because we all believed they delivered higher margins and higher returns. In fact, that is no longer the case, and may never have been the case. But, nonetheless, when we were short of everything, we began with expensive buildings.
We built estates of detached houses and town houses, high end rental apartments, shopping malls, often huge ones, and towering office blocks. Until in some areas, and for the highend market, we began to reach market saturation. As a result, an investor now putting up Sh100m worth of penthouses,
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